We study good-by-good deviations from the Law-of-One-Price for over 5,000 goods and services between European Union countries for the years 1975, 1980, 1985 and 1990. We …nd that between most countries there are roughly as many overpriced goods as there are underpriced goods. Equally-weighted and CPI-weighted averages of good-by-good relative prices generate relatively accurate predictions of most nominal cross-rates, as purchasing power parity (PPP) would suggest. These …ndings are robust across years, in spite of relatively large movements in nominal exchange rates. Variation around the averages is large but is found to be related to economically meaningful characteristics of goods such as international tradeability, non-tradedness of factors of production and the competitive structure of the markets in which the goods are sold. Using data on product brands, we …nd that product heterogeneity is at least as important as geography in explaining relative price dispersion. Overall, our data provide strong evidence that international goods markets are segmented, but (i) the evidence relies on absolute deviations from the Law-of-One-Price, not deviations from PPP, (ii) some markets are much more segmented than others, with the distinctions being consistent with economic theory.
I use U.S. manufacturing industry data to estimate a system of three equations implied by a model of R&D-induced growth in steady state. These equations relate R&D intensity to patenting, patenting to technological progress, and technological progress to economic growth. In each case, I find evidence of positive impact. Thus, I reject the null hypothesis that growth is not induced by R&D in favour of the Schumpeterian endogenous growth framework without scale effects. I also find strong support for technological spillovers from aggregate research intensity to industry-level innovation success. JEL Classification: O40, O30 R&D, innovation, et progre`s technologique: un test du cadre schumpe´te´rien en l'absenced'effets d'e´chelle. L'auteur utilise des donne´es de l'industrie manufacturie`re pour calibrer un syste`me de trois e´quations e´mergeant d'un mode`le de croissance en re´gime permanent induite par le R&D. Ces e´quations relient l'intensite´de R&D a`l'obtention de brevets, l'obtention de brevets au progre`s technologique, et le progre`s technologique a`la croissance e´conomique. Dans chaque cas, on trouve un impact positif. En conse´-quence, l'auteur rejette l'hypothe`se nulle que la croissance n'est pas engendre´e par le R&D en faveur de l'hypothe`se de croissance endoge`ne a`la Schumpeter sans effets d'e´chelle. L'auteur confirme fortement l'hypothe`se d'effets de retombe´es technologiques sur le succe`s de l'innovation au niveau de l'industrie en conse´quence d'une forte intensite´de recherche.
The study uses aggregate and manufacturing sector data for a group of ten OECD countries for the period 1971 to 1995 to estimate a system of two equations implied by a model of R&D-induced growth in steady state. These equations relate R&D intensity to productivity growth and the latter to output growth. The author finds evidence of a positive impact of aggregate R&D intensity on the growth rates of productivity and output. The null hypothesis that growth is not induced by R&D is rejected in favor of the Schumpeterian endogenous growth framework without scale effects. The R&D impact for the aggregate economy is distinctly larger than for the manufacturing sector. Finally, an extension of the empirical model shows that openness has a positive impact on productivity growth.
This paper evaluates various channels through which foreign technology diffuses to the manufacturing sector of developing economies. These economies undertake virtually no own R&D, so they rely on foreign technology to a much larger extent than developed economies. We investigate the direct effect of foreign R&D, as well as technology embodied in imports of intermediate and capital goods and foreign direct investment, on the growth of total factor productivity and value added in the manufacturing sector of 32 economies during 1965-92. We find that foreign R&D typically has the biggest positive impact on domestic productivity and value-added growth. Imports of capital goods and foreign direct investment also play a similar role, but their effect is of smaller magnitude and is not always significant. Copyright Blackwell Publishing Ltd 2005.
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